Loblaw beats on revenue and profit as online sales double

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Grocer now expects to exceed profit estimates for year

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Canadian retailer Loblaw Cos Ltd beat market estimates for quarterly revenue and profit on Wednesday, as its online sales more than doubled on soaring demand from homebound buyers for groceries and other essentials during the COVID-19 pandemic.

Lockdowns and other virus-related restrictions in Canada, including reduced store capacity, during the first three months of the year pushed consumers to stockpile groceries and other essential items.

Loblaw, one of the biggest retailers in Canada, said that the momentum from the first quarter has continued into the current quarter, adding that it expects to exceed its own full-year profit expectations.

However, the company has warned that its food retail unit, which saw a surge last year at the peak of stockpiling, would not be as robust in the current quarter. In the first month of the ongoing quarter, food same-store sales have declined slightly, Loblaw said.

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For the second quarter, the company expects to incur pandemic-related costs of about US$65 million to US$75 million, compared with US$282 million a year earlier.

Net earnings available to its common shareholders rose to $313 million, or 90 cents per share, in the quarter ended March 27 from $240 million, or 66 cents per share, a year earlier.

Excluding one-time items, the retailer earned $1.13 per share, beating the average analysts’ estimate of 87 cents per share.

Its revenue rose to $11.87 billion in the first quarter from $11.80 billion a year earlier, surpassing analysts’ estimate of $11.72 billion, according to IBES data from Refinitiv.

© Thomson Reuters 2021